Wednesday, June 21, 2017
Will I Lose My Life Insurance If I File Bankruptcy?
Bankruptcy is a way to reduce or wipe out your debts, but if there are certain things you want to keep you do have to keep making payments. Most people opt to keep their cars and house, and so continue to keep up with those monthly payments even if they file for bankruptcy. But what about some of your other needs, such as electricity and insurance? There are a lot of questions about how every day expenses are handled when a bankruptcy gets filed, and it is important to know the answers because no one wants to have the air conditioning turned off or get caught driving without auto insurance. The good news is that if you file for bankruptcy, you get to eliminate some debts, which makes it easier to pay others. For instance, if you no longer had to pay all of your credit card debt, you might be in a better position to pay your utilities and buy groceries every week.
Another expense that people are happy to continue paying when they file bankruptcy is their life insurance premiums. But since this is not a daily need, you might be wondering if you will lose your life insurance if you file for bankruptcy. You will not, and here is why:
• Your debt load will decrease when you file bankruptcy.
• When you owe less, you have more disposable income to work with each month.
• When you have more disposable income to work with each month, you can allocate the funds on hand to the things you need.
• Life insurance is a necessity for most families, and when you have enough money to pay the premiums each month, the provider will not cancel your policy.
Bankruptcy can also be helpful in other ways. For example, you can reduce the amount of debt on your car if you file a Chapter 13, and you can also lower the interest rate on an auto loan by filing a Chapter 13 bankruptcy case. If you file a Chapter 7 case you will be allowed to get rid of all of your unsecured debt, which is the appeal to this type of case for many consumers. High interest rate credit card debt is one of the most difficult types of debt to keep up with, but when you file a Chapter 7 case you no longer have to worry about how to pay off those card balances.
For more information about bankruptcy, contact us at www.law-ri.com. We will help by coming up with solutions that work for you and have multiple locations to meet your needs for office visits.